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Retail sales of licensed merchandise based on sports properties and athletes declined X.X% in 2010, totaling $XX.XX billion in 2010 versus $XX.XX billion in 2009, according to THE LICENSING LETTER'S Annual Licensing Business Survey and one-on-one interviews with licensees and licensors.

That decrease was small enough to place sports among the best-performing major property types of 2010. It also was a major improvement over 2009, when retail sales of licensed sports merchandise fell XX.X% compared to 2008.

As was the case in other licensing sectors, including Fashion and Entertainment/Character, the biggest properties--in this case the four major professional leagues and a handful of other properties--seem to be benefiting first from the economic recovery. All four major leagues saw increases in retail sales and market share in the U.S. and Canada for calendar year 2010 (see table). The NHL publicly reported XX% growth in its global consumer products business in the current fiscal year; we estimate its U.S./Canada growth at just under XX%.

Secondary and tertiary properties, such as minor leagues and teams, and alternative sports outside of the majors, did not fare as well. "I think the economy had a drag in the minor league ballparks and arenas," says one licensee. "Attendance was steady, but people were spending less in apparel and headwear once they got to the game."

NASCAR, too, while still a leading property, saw sales decline as well, in part due to its changing the structure of its licensing operations. It signed a broad-based deal with Walmart earlier this year and has been allowing deals to expire as it reorganizes.

All told, the share of retail sales of sports licensing generated by "Other" properties fell to XX.X% (including X.X% of that from global sports events), versus XX% the previous year. "Other" includes golf outside of PGA Tour; racing outside NASCAR; Manchester U and other soccer leagues beyond Major League Soccer; minor league teams; individual athletes including boxers and tennis players; and other sports such as hunting, fishing, and volleyball, among others.

There were two big global sports events that drove some licensing in the U.S. and Canada in 2010--the FIFA World Cup and the Winter Olympics.

The World Cup was in South Africa and accounted for a relatively small amount of sales in the U.S. market compared to other countries.

The Winter Olympics always drives fewer sales than the summer games, even this time, when it was based in Canada and had Canadian and U.S. teams in its marquee gold-medal hockey game.

The Olympics also was impacted by the still-poor economy at the beginning of the year, plus a chunk of total sales occurred in 2009 in the months leading up to the February event.

In terms of product categories, those that saw slight growth overall--and significant growth for certain properties--included the core categories of videogames/software (up X.X%), accessories (up X.X%) and apparel (up X.X%). Sports was one of the few property types that saw growth in multiple product categories in 2010.

Some of the areas that saw particular increases, according to those surveyed, included children's and women's products. Not only are these smaller areas with room for growth, but they tend to be affected less than the market as a whole by economic ups and downs, event location, and team performance.

"Kids gravitate to sports and you don't see these huge ups and downs," says one licensee. "This is still a big chase business, for the hot players and teams, but it doesn't impact the children's area as much. If they want a team shirt for the holiday, they want a shirt."

Meanwhile, categories that saw steep declines were those that were further away from the core business, including stationery/paper (down X.X%), domestics (down X.X%), and furniture/home furnishings (down X.X%).

Most survey respondents and interviewees are optimistic about 2011, but that view is tempered by uncertainty. All the leagues are facing collective bargaining negotiations, with the risk of shortened or canceled seasons, first for the NFL and NBA and in 2012 for MLB and the NHL.

If the leagues don't play, that will impact retail sales levels. Some respondents report that, even in early 2011, retail buyers are leery of purchasing much NFL merchandise due to the risk of a non-season, regardless of current consumer demand.

Also worth watching: The NFL's agreement with Nike as the official outfitter of the NFL--replacing Reebok--and as one of just seven fan apparel, headwear and gear licensees, will kick off in 2012.